U.S. stocks bounced back from their steepest weekly declines of the year to close significantly higher on Monday, with all sectors of the S&P 500 experiencing gains.
The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average each rose by 1.2%. These major indexes had experienced a downturn on Friday, following the August jobs report which indicated a continued decline in the labor market. This release triggered a selloff in technology stocks, resulting in the Nasdaq experiencing its worst weekly performance since January 2022.
On Monday, leading tech stocks showed recovery, with Nvidia (NVDA) climbing 3.5%. Other major tech companies also posted gains, including Microsoft (MSFT), Meta Platforms (META), and Amazon (AMZN). Apple (AAPL) ended the day slightly higher after announcing its new iPhone 16 featuring AI capabilities and other product updates. However, Alphabet (GOOGL) saw a 1.6% decline as it faced a court case concerning antitrust issues.
Chip stocks, which faced significant losses on Friday, also rebounded on Monday. The VanEck Semiconductor ETF (SMH) increased by 2.3%, with Arm Holdings (ARM) rising by 7% and Broadcom (AVGO) gaining 2.8%, recovering from a substantial drop following their earnings report on Friday.
Boeing (BA) shares climbed 3.4% after the company reached a tentative deal with two unions, helping to potentially avoid a strike. In addition, shares of Palantir (PLTR) surged 14%, and Dell (DELL) rose 3.8% after both companies were announced to be included in the S&P 500 effective September 23.
Monday’s economic data releases were minimal as attention turns to upcoming inflation figures that the Federal Reserve will closely monitor while deliberating potential cuts to the influential fed funds rate for the first time in four years. Fed Chair Jerome Powell and other officials hinted that cuts could occur as soon as the September 18 policy committee meeting, although they emphasized that forthcoming data will guide their decisions regarding the timing and extent of any easing.
Market analysts currently project a 29% chance that the Fed will reduce the benchmark interest rate by 0.5% in the coming week, according to the CME Group’s FedWatch tool, which assesses rate trends based on fed funds futures data. The likelihood for such a cut had exceeded 50% on Friday due to the disappointing August employment numbers, but declined throughout Monday’s trading session.
The yield on the 10-year Treasury bonds, which reacts to interest rate expectations, remained relatively stable around 3.70%. On Friday, following the jobs report, yields had dropped to 3.65%, marking their lowest point in over a year.
Gold futures slightly increased on Monday, trading around $2,540 an ounce, while Bitcoin neared $57,000 after dipping below $53,000 late Friday.